Writing on the wall

Sobering little article from Bloomberg:

Roubini Calls U.S. Growth �Dismal and Poor,� Predicts Slowing
New York University Professor Nouriel Roubini, who anticipated the financial crisis, called the fourth quarter surge in U.S. economic growth �very dismal and poor� because it relied on temporary factors.

Roubini said more than half of the 5.7 percent expansion reported yesterday by the government was related to a replenishing of inventories and that consumption depended on monetary and fiscal stimulus. As these forces ebb, growth will slow to just 1.5 percent in the second half of 2010, he said.

�The headline number will look large and big, but actually when you dissect it, it�s very dismal and poor,� Roubini told Bloomberg Television in an interview at the World Economic Forum�s annual meeting in Davos, Switzerland. �I think we are in trouble.�

Roubini said while the world�s largest economy won�t relapse into recession, unemployment will rise from the current 10 percent, posing social and political challenges.

�It�s going to feel like a recession even if technically we�re not going to be in a recession,� he said.

Both the uptick in the economy and the 10% unemployment figures are highly influenced by the Christmas season and this present quarter will show numbers that are a lot worse. The government is hiring 1.4 million people to assist in the 2010 Census so that will offset unemployment numbers for about six months, all the while jobs are being lost from non-government sectors. What looks like a heartening uptick could well be just a speedbump on the road down.